How interest rate hikes affect you and your wallet
The Federal Reserve raised interest rates again. The latest raise was 0.50%. If you’re keeping track, that’s seven rate increases in 2022. In March, the Fed started the year with a rate increase of 0.25%. It was the first rate increase in more than three years. Is this going to keep happening? Will there be more rate increases in the near future? It’s possible. But let’s take a look at what it means for you and your money.
Here’s What Happened Recently
The latest interest rate hike of 0.50% was announced on December 14, 2022. Federal Reserve Chairman Jerome Powell said, “The Fed is strongly resolved to bring inflation down to 2%, and we will keep at it until the job is done.”
To gauge just how long that may take, the U.S. inflation rate is 7.1% using the most recent government data. Based on Powell’s comments, we may continue to see rate hikes for the foreseeable future until that inflation number comes down.
The Big Picture on Interest Rates
Our goal is to equip you with the latest, relevant information to make good financial decisions. And in the case of interest rates and inflation, it’s helpful to know the big picture, so when you see a headline about “rate hikes” or “inflation is rising,” you’ll know what that means for you and your money.